Japan’s economy scored a whooping 4.1 percent annual growth in the first quarter, higher than the 3.5 percent expected by analysts and better than the 2.2 percent reported by the U.S. for the same period. Japan’s performance was also better than the numbers registered by Europe’s largest economies, Germany, Britain, France and Italy.
“Consumer spending and public investment are what drove the economy, with auto demand stirred by government subsidies and investment helped by extra budgets after the earthquake,” said Yoshimasa Maruyama, chief economist at Itochu Economic Research Institute.
He warned that the government money may have influenced the GDP more than expected, which means that the latest growth may not reflect exactly the real strength of Japan’s economy.
Compared to the previous quarter, the economy grew by 1.0 percent, above analysts’ expectation of 0.9 percent.
“Consumer spending is proving robust, but the key to sustainability for the economic recovery is whether or not exports regain strength,” said Takeshi Minami, a chief economist at Norinchukin Research Institute.